Retailing Strategy Def:- Retail Strategy would mean clear and definite plan that the retailer outlines to tap the market and build a long-term relationship with the consumers. Statement Identifying / Elements 1. Target Market 2. Retail Format 3. Sustainable Competitive Advantage Market segment towards which the retailer plans to focus its resources & retail mix. Retailer mix:- nature of merchandise, services offered, pricing policy, advertising, Promotion program, store design, visual merchandising location Advantage over competition that can be maintained over a long time.

Target Market & Retail Format Retail Concept :- focuses a retailer on determining the needs of its target market & satisfying those needs more effectively & efficiently than its competitors. Retail Market :- a group of consumers with similar needs (a market segment) & a group of retailers using a similar retail format to satisfy those consumer needs. Example :- Retail Market for Women’s Apparel Fashion Segment Retail Formats ConservativeTraditionalFashion-Forward Specialty Store Departmental Store Discount Store Catalog

This example /matrix, describes the battlefield on which women’s clothing retailers compete. The position in this battlefield indicates the first 2 elements of a retailers strategy - Target market - Retail Format Example :- Retail Market for Women’s Apparel Fashion Segment Retail Formats ConservativeTraditionalFashion-Forward Specialty Store Departmental Store Discount Store Catalog/ internet W- Aso-palav Roopkala, Nali Levis, Pepe Jeans West-side Pantaloons Indiamart.com Shoppers Stop

3 rd element :- Sustainable Competitive Advantage Opportunities for retailers to develop sustainable competitive advantage :- - Customer Loyalty - Location - HRM - Distribution & Information System - Unique Merchandise - Vendor Relations - Customer service

Growth Strategies Growth opportunities or Alternatives are :- 1. Market Penetration 2. Market Development 3. Retail Format Development 4. Diversification TARGET MARKET RETAIL FORMATS ExistingNew Existing New MARKET PENETRATION -Increase the basket size -Increase the customers -Increase the purchase frequency -Increase no. of stores -Long hours -Cross selling MARKET DEVELOPMET/EXPANSION -New market segments with existing format -New customer base RETAIL FORMAT DEVELOPMET -New format for existing customers DIVERSIFICATION -New retail formats directed at new market segments

Examples :- Market Penetration :- Freebies :- Buy 1 shirt get a tie free Market Expansion/Development :- McDonald’s :- introduced ice creams for RS 7, which added to sales & also brought customers who has perception of McDonald being an expensive fast food restaurant Retail Format Development :- Crosswords :- opening smaller format stores by the name of crossword corner at Shopper’s Stop Diversification :- Tobacco giant ITC – entering the business of apparel by its Wills Lifestyle store & now plans the greeting cards business.

Global Growth Opportunities Key to success :- 4 characteristics 1. Globally sustainable competitive advantage 2. Adaptability 3. Global Culture 4. Deep Pockets – staying power Some Core Competitive Advantages for Global Retailers Core AdvantageGlobal Retailer Low Cost;efficient operations WalMart Strong private brands Starbucks Fashion reputation Zara, Tommy Hilfiger Category Dominance Home Depot Image Disney, Warner Brothers

Entry Strategies 1. Direct Investment 2. Joint Venture 3. Strategic Alliance :- enter an international market through direct investmetn but develop an alliance with a local firm to perform logistical & warehousing activities. 4. Franchising

Steps in the Strategic Retail Planning Process 1. Define the business mission 2. Conduct a situation audit Market attractiveness analysis Competitor analysis Self-analysis 3. Identify Strategic opportunities 4. Evaluate Strategic Alternatives 5. Establish specific objectives and allocate resources 6. Develop a retail mix to implement strategy 7. Evaluate performance & make adjustments

Step :1 Define the Business Mission Mission Statement :- is a broad description of a retailers objectives & the scope of activities it plans to undertake. In developing the mission statement 5 ques :- 1. What business are we in ? 2. What should be our business in the future ? 3. Who are our customers ? 4. What are our capabilities ? 5. What do we want to accomplish?

Step : 2 Conduct a Situation Audit Situation Audit :- is an analysis of the opportunities & threats in the retail environment & the strengths & weaknesses of the retail business relative to its competitors. Elements in a Situation Analysis or Market Analysis MARKET FACTORS COMPETITIVE FACTORS ENVIRONMENTAL FACTORS ANALYSIS OF STRENGHTS & WEAKNESS Size Growth Seasonality Business Cycles Barriers to entry Bargaining power of Vendors Competitive rivalry Technology Economic Regulatory Social Management capabilities Financial Resources Locations Operations Merchandise Store Management Customer Loyalty

Step : 3 Identity Strategic Opportunities - For increasing retail sales Market Penetration Market Expansion Retail Format Development Diversification Step : 4 Evaluate Strategic Opportunities The evaluation determines the retailer’s potential to establish a sustainable competitive advantage & reap long-term profits from the opportunities under evaluation. Ex:- developing private-label

Step : 5 Establish Specific Objectives & Allocate Resources The specific objectives are goals against which progress toward the overall objective can be measured. 3- components :- 1. Numerical index of Performance 2. Time frame to achieve goals 3. Level of investment needed Step : 6 Develop a Retail mix to implement Strategy Merchandise & Format Step : 7 Evaluate Performance & Make Adjustments